Syndicated Lending

Structuring and Implementing Syndicated Credits
2. Auflage 2005
ISBN: 978-1-85564-889-0
Verlag: Euromoney

Buch, Englisch, 224 Seiten

Syndicated Lending, 2nd edition clearly explains both the theory and practice of syndicated lending and, having examined the skills necessary for success, teaches you how to apply them.

In 6 detailed modules Syndicated Lending examines each step of the syndicated lending process and on completion of the course you will:

understand the workings of both the primary and secondary markets;
be able to analyse the advantages and disadvantages of syndicated loans, including their suitability for funding an acquisition;
have studied the roles of the various participants and know how best to structure a syndicate;
have a comprehensive understanding of the legal framework including the content and structure of loan agreements;
have a detailed knowledge of differing loan types and their uses;
understand the borrower's needs and requirements and;
be able to apply what you have learnt to real-life situations.

Who Should Read this?
Those involved in syndicated lending, corporate financiers, analysts, risk managers, securisitation and structured finance managers, lawyers, treasurers, and investment managers.

Autoren/Hrsg.

Fight, Andrew

Fachgebiete

• Wirtschaftswissenschaften Finanzsektor & Finanzdienstleistungen Bankwirtschaft
• Wirtschaftswissenschaften Finanzsektor & Finanzdienstleistungen Internationale Finanzmärkte
• Wirtschaftswissenschaften Finanzsektor & Finanzdienstleistungen Unternehmensfinanzierung
• Wirtschaftswissenschaften Betriebswirtschaft Unternehmensfinanzen Finanzierung, Investition, Leasing

Inhaltsverzeichnis

Module One

I. Introduction

II. Banking Sector Overviews

A. History and background to the syndicated lending markets

B. Bank sector analysis

1. Introduction to types of banks
2. Commercial banks
3. Merchant/investment banks
4. International bank branches
Exercise one

III. Syndicated Lending Overview

A. What is a syndicated loan?

B. The syndicated loan market

1. Commercial and syndicated lending
2. Some characteristics required for arranging syndicated loans
3. Primary syndicated lending markets
4. Primary and secondary (asset sales) market developments
Exercise two

C. Advantages/drawbacks of syndicated loans as a financing vehicle

1. Debt versus equity
Exercise three

D. Term loans

1. Overview of term loans
2. Advantages of term loans
3. Disadvantages of term loans
4. Uses of term loans

E. Revolving credits

1. Overview of revolving credits
2. Characteristics of revolving credits
3. Uses of revolving credits
4. Types of revolving credits

F. International lending

1. Introduction
2. Sovereign lending
3. Private sector lending

G. Project finance

1. Characteristics
2. Non-recourse and limited recourse
3. Main reasons for project financing
4. Risk phases in project financing

H. Maturities and repayment schedules

Exercise four

I. Pricing of term loans

IV. The secondary markets

A. Secondary market overview

B. Asset sales

1. Introduction - what are asset sales?
2. Underlying rationale of the secondary markets
3. Regulatory matters
4. Effectiveness of these techniques

C. Loan transfers (LDC debt swaps)

1. The asset swap deal
2. Mechanics of an asset swap deal
3. Principle players in the market
4. Potential marketing targets
5. Potential marketing costs

D. Secondary market trading associations and the internet

1. Loan Syndications and Trading Association
2. Loan Market Association
3. Equavant Group
Exercise five

V. Conclusion

A. The future syndications markets

B. Availability and capacity

C. Structural change

D. Driving growth in the market

E. The major players

F. The new entrants

G. The secondary market

H. Sources of future growth

I. The internet

J. Summary

Answers to exercises
Glossary

Module Two

I. Introduction

II. The Syndications Process

A. Rationale for the syndicated lending market

B. Role of agent bank and facility agent

C. The syndication sales cycle and principal milestones

1. Pre-mandate
2. Post-mandate
3. Closing the loan syndication
4. Post-closing
Exercise one

D. Structuring the syndicate

1. Important considerations in the syndication
2. Formation of the syndicate
3. 'Best efforts' underwritten syndications
4. Lead manager's commitments to the borrower
Exercise two

E. The information memorandum

1. Characteristics of the information memorandum
2. Legislation relating to information memoranda
Exercise three

F. Key issues for bidding banks

1. Calculating and establishing fees
2. Negotiations between mandated banks
3. Yield calculations

G. Pricing for syndication

1. Introduction
2. How to price a syndicated deal
3. Conclusion

H. Role of participating banks

1. Lead bank's relationship with the participants
2. The players
3. Why participate in syndicated transactions?
4. How to participate
5. The associated risks
6. Recent trends
Exercise four

I. Potential uses of financing

1. Acquisitions versus internal growth
2. Acquisitions versus strategic alliance
3. Diversification
4. New markets: cross-border
5. Management/operating turnaround
Exercise five
Answers to exercises

Module Three

I. Syndicated Loan Agreements

A. Purpose of loan agreements

B. Loan agreement issues

1. Participants
2. Ensuring compliance with loan agreements

C. Structure of loan agreements

1. Introduction
2. Preamble
3. Definitions
4. Amount
5. Drawings
6. Commitment and other fees
7. Interest
8. Repayment
9. Prepayment and cancellation
10. Representations and warranties
11. Covenants and undertakings
12. Events of default
13. Payments
14. Changes in circumstances
15. Expenses
16. Governing law

D. Loan agreement checklist

II. Direct Participations

A. Agent bank

1. Appointment and resignation
2. Implied fiduciary duties
3. Rights and powers
4. Exclusion clauses

B. Participants

1. Decision making
2. Sharing of payments

III. Conventional Indirect Participations

A. Novation

1. Transfer of obligation
2. Transfer instrument
3. The participant, the agent and the other lenders
4. Transfer instruments distinguished from transferable loan certificates
5. Other considerations

B. Assignments

1. Assignment of the debt
2. Assignment of the proceeds
3. Loan agreement restrictions
4. Stamp duties

C. Sub-loan

D. Guarantee

E. Duties and liabilities of the original lender

1. Information
2. The Financial Services Act 1986 - Investment business
3. Fiduciary duties
4. Indemnity from participant

F. Rights of the participant

1. Compensation clauses
2. Participants' and original lender's rights of set-off
3. Borrower's rights of set-off

G. Balance sheet considerations

1. Introduction
2. Bank of England Notice/FSA Guide
3. Specific conditions of the Guide
4. General conditions of the Guide
5. Conclusion

H. Summary of conventional indirect participations

1. With contractual relationship with borrower
2. No contractual relationship with borrower

IV. Credit Derivatives As Indirect Participations

A. Credit-linked note

B. Credit default swap

C. Total return swap

D. Legal relationships with borrower

E. Documentation

F. Other legal issues

1. Insurance
2. Gaming or wagering

G. Duties and liabilities of original lender

1. Information
2. Financial Services Act 1986
3. Fiduciary duties
4. Indemnity from participant

H. Rights of participant

1. Compensation clauses
2. Original lender's rights of set-off
3. Borrower's rights of set-off

I. Balance sheet considerations

1. Bank of England/Financial Services Authority
2. Conclusion

V. Secured Loans

A. Direct participations

B. Indirect participations

C. Continuing dangers of novation

Exercise one
Answers to exercise

Module Four

I. Facility Structure And Analysis

A. Syndicated loans - characteristics, types and uses

1. What is a syndicated loan?
2. Why use a syndicated loan?
3. Main features of syndicated loans
4. Types of syndicated loans
5. Syndicated loan maturity schedules
6. Pricing considerations
7. Loan agreement covenants
8. Syndicated loan structure - capital adequacy considerations
Exercise one

B. Credit analysis and information memoranda

1. Introduction to information memoranda
2. Contents of information memoranda
3. Primary characteristics of information memoranda
Exercise two

C. Traditional financing

1. Standby facilities (temporary/seasonal finance)
2. Working capital lending
3. Cash flow lending
4. Revolving credits
Exercise three

D. Acquisition financing

1. Leveraged buyout/management buyout
2. Understanding the players - buyers, sellers and advisers
3. Corporate valuation
4. Credit analysis
5. The management team
6. Cash flow
7. Collateral
8. Capital
9. Industry conditions
10. Structure of the loan
11. Summary
Exercise four

E. Project financing

1. What is project financing?
2. What advantages can project financing offer?
3. What are the applications of project financing?
4. What are the roles in project financing?
5. Project finance documentation issues
6. Project finance syndicated lending market
7. Project finance syndication strategy
Exercise five

F. Debt refinancing

G. Long-term credits - disbursement

1. Straight and standby term loans
2. Pricing
3. Documentation

II. Problem loan management

A. Introduction

B. Early warning signs

C. Fact finding and damage control

D. Continuation of the business

E. Summary

Exercise six
Answers to exercises

Module Five

I. The Borrower's Viewpoint

A. Introduction

1. What is the syndicated loan borrower looking for?
2. What are the banks looking for?
3. Negotiating fees
4. Covenants and warranties
5. Conditions precedent
6. Documentation
Exercise one

B. Optimal capital structure

1. Different types of financing
2. The advantages of leverage
3. The disadvantages of leverage
4. Conclusion
Exercise two

C. Overview of corporate debt

1. The trade-off theory
2. Pecking order theory
3. Debt versus equity
4. Advantages of syndicated loans
Exercise three

D. The information memorandum

1. Background
2. Contents
3. Characteristics
4. The borrower's viewpoint
Exercise four

E. Assembling the borrower's debt raising team

1. The sponsors
2. The corporate financial adviser
3. The banks
4. The lead manager (or arranging bank)
5. The facility agent
6. Technical consultants
7. Lawyers and accountants
8. Governments
9. Governments in exporting countries
10. Multinational agencies
11. Conclusion
Exercise five

F. Credit rating agencies

1. The purpose of credit ratings
2. Corporate rating methodology
3. A generic checklist of ratings criteria for corporate borrowers
4. Example of rating scales (Standard & Poor's)
Exercise six
Answers to exercises

Module Six

I. Syndicated Lending Case Studies

A. The role of the agent bank

1. Introduction to the case study
2. Introduction
3. The loan syndication
4. Relationship of syndicate members
5. Conclusion
Exercise one

B. The rise in big ticket lending

1. Introduction to the case study
2. Syndicated loans - July 1999
3. Consolidation effects
4. 'Market flex'
5. Pricing considerations
6. Euro-M&As fuel syndicated loans growth
Exercise two

C. Growth in the secondary loan market

1. Introduction to the case study
2. Secondary loan market takes off
Exercise three

D. Eurotunnel project financing

1. Introduction to the case study
2. Promoters and founder shareholders
3. History of the Eurotunnel syndicated loan
4. Key milestones in the financing process
5. Equity structure
6. Eurotunnel debt structure
7. Credit agreement operation
8. Credit agreement costs
9. Credit agreement terms and repayments
10. Credit agreement controls and reporting
11. Credit agreement security
Exercise four

E. Energy project finance in Turkey

1. Introduction to the case study
2. The future of energy
Exercise five

F. Various caselets

1. Vodafone in record US$128.5 billion hostile bid for Mannesmann
2. Olivetti - Telecom Italia
3. Airbus A380 - the world's largest commercial jet
4. BP Amoco case
Exercise six
Answers to exercises